(Bloomberg) — Singapore’s economy grew faster than expected in 2023, as year-end gains in manufacturing and construction coupled with relative strength in the services sector helped add momentum to activity.
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Gross domestic product grew 1.2% during the year, according to advance estimates Tuesday from the Ministry of Trade and Industry. That’s better than the government’s projection for an annual expansion of around 1%.
The stronger-than-expected performance followed a 1.7% GDP expansion in the three months through December from the prior quarter. On a year-on-year basis, the economy expanded 2.8% last quarter.
Exports returned to growth in November, snapping 13 months of decline, and factory output increased in the final months of the year, helping shore up overall growth. While services sector showed relative strength during the year, Prime Minister Lee Hsien Loong on Sunday tempered any optimism as he flagged risks from an uncertain external environment.
“For some years to come, we must expect the external environment to be less favorable to our security and prosperity,” Lee said in his New Year’s message. “Geopolitical uncertainties will continue weighing on the global economy.”
The government’s outlook for 2024 remains unchanged for now, as Lee on Sunday reiterated the ministry’s earlier forecast that the economy will expand in a range of 1%-3%.
That outlook depends on a durable recovery in global trade, given that exports are equivalent to more than one-and-a-half times the size of the island’s economy. The gains in exports in November were largely on account of a low year-ago base.
–With assistance from Tomoko Sato.
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